April 6, 2026

Incoterms Explained: FOB, EXW, and CIF

Aerial view of a shipping container yard, illustrating Incoterms FOB, EXW, and CIF

When you ask a Chinese supplier for a price, the number means little until you know the Incoterm attached to it. These short codes decide who pays for shipping, who handles risk, and where the supplier's responsibility ends. Three matter most.

EXW: Ex Works

With EXW, the supplier simply makes the goods available at their factory. Everything after that, including local transport, export clearance, shipping, insurance, and import, is your responsibility.

Lowest quoted price, but you arrange and pay for everything
Most control, most work
Good when you have a freight partner handling the rest

FOB: Free On Board

With FOB, the supplier delivers the goods onto the ship at a Chinese port and handles export clearance. From that point, the cost and risk are yours.

The most common term for China imports
Supplier handles the China side; you handle sea freight onward
Easy to compare quotes fairly

CIF: Cost, Insurance, and Freight

With CIF, the supplier arranges and pays for shipping and insurance to the destination port. It looks convenient, but you have less control over the freight choice and often pay a markup.

Supplier arranges shipping to your port
Convenient, but less control and sometimes higher hidden cost

Which should you choose?

For most importers working with a freight partner, FOB offers the best balance of price and control. EXW can be cheaper still if your partner manages the China-side pickup. CIF is the most hands-off but rarely the cheapest.

We handle any term

Whatever Incoterm your supplier offers, we can take over from there: pickup, consolidation, shipping, and customs. Send us your supplier's quote and we will tell you the true landed cost.

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